HONG KONG, Aug. 22, 2019 /PRNewswire/ -- China Life
Insurance Company Limited (SSE: 601628, SEHK: 2628, NYSE: LFC)
announces the unaudited consolidated results of the Company (China
Life Insurance Company Limited and its subsidiaries) for the six
months ended 30 June 2019 (the
"Reporting Period") prepared under the International Financial
Reporting Standards today.
Highlights
- As at the end of the Reporting Period, the Company's total
assets reached RMB3,479,860 million,
an increase of 6.9% from the end of 2018. The Company's embedded
value was RMB886,804 million, an
increase of 11.5% from the end of 2018.
- During the Reporting Period, the Company's total revenues was
RMB448,221 million, an increase of
11.6% year-on-year; the Company's gross written premiums were
RMB377,976 million, an increase of
4.9% year-on-year; the value of half year's sales for the six
months ended 30 June 2019 was
RMB34,569 million, an increase of
22.7% year-on-year.
- As at the end of the Reporting Period, the Company's investment
assets reached RMB3,304,129 million,
an increase of 6.4% from the end of 2018. During the Reporting
Period, the gross investment yield was 5.78%, the net investment
yield was 4.66%. The comprehensive investment yield taking into
account the current net fair value changes of available-for-sale
securities recognized in other comprehensive income was
8.25%.
- During the Reporting Period, net profit attributable to equity
holders of the Company was RMB37,599
million, an increase of 128.9% year-on-year.
- The Company will not declare an interim dividend of ordinary
shares for the Reporting Period.
Business Overview of the First Half
of 2019
In the first half of 2019, the Chinese economy generally
maintained steady growth, and the situation at home and abroad was
intricate and complex. Given that the uncertainties in the external
environment brought about pressures and challenges to the insurance
market, the insurance industry increasingly deepened transformation
and upgrade, and the life insurance industry moved towards
high-quality development. During the Reporting Period, the Company
firmly concentrated on the strategic goal of "China Life
Revitalization" with "Dual Centers and Dual Focuses" as its
strategic core and adhered to the operational guideline of
"prioritizing business value, strengthening sales force, achieving
stable growth, upgrading technology, optimizing customer services
and guarding against risks". By adopting a "customer-oriented"
approach and concentrating on local branches and field offices, and
sticking to the fundamental requirement of high-quality
development, the Company pushed forward various tasks in an active
and prudent manner. For the first half of 2019, the core business
of the Company developed rapidly and its business structure was
optimized consistently, which resulted in a significant growth in
its business value. The Company's sales force was enhanced in both
quantity and quality, its investment income increased
significantly, and its profitability was improved substantially. In
the meanwhile, technology-empowered operation became a new driving
force for the Company's business development. The Company has made
a fresh headway in an all-round way.
During the Reporting Period, the Company's gross written
premiums amounted to RMB377,976
million, an increase of 4.9% year-on-year. As at
30 June 2019, the embedded value of
the Company reached RMB886,804
million, an increase of 11.5% from the end of 2018. The
value of half year's sales was RMB34,569
million, an increase of 22.7% year-on-year. During the
Reporting Period, the Company's gross investment income reached
RMB88,923 million, an increase of
68.0% year-on-year. Net profit attributable to equity holders of
the Company was RMB37,599 million, an
increase of 128.9% year-on-year. As at the end of the Reporting
Period, the core solvency ratio and the comprehensive solvency
ratio were 258.62% and 269.09%, respectively.
During the Reporting Period, the Company continued to optimize
its business structure. First-year regular premiums amounted to
RMB83,133 million, which accounted
for 98.79% in long-term first-year premiums, increasing by 9.79
percentage points year-on-year. In particular, first-year regular
premiums with a payment duration of ten years or longer was
RMB38,082 million (a year-on-year
increase of 68.0%), which accounted for 45.81% of the first-year
regular premiums (a year-on-year increase of 18.07 percentage
points). Single premiums were RMB1,020
million, a decrease of 89.9% year-on-year, and the
percentage of single premiums in long-term first-year premiums was
reduced to 1.21% from 11.00% of the corresponding period in 2018.
Renewal premiums amounted to RMB250,131
million (a year-on-year increase of 6.4%), which accounted
for 66.18% of the gross written premiums, a slight increase
compared to the same period in 2018.
During the Reporting Period, the Company's business value was
improved significantly. The value of half year's sales of the
Company was RMB34,569 million, rising
by 22.7% year-on-year. The new business margin of half year's sales
of the exclusive individual agent channel and the bancassurance
channel increased by 4.2 and 7.9 percentage points year-on-year,
respectively. As at 30 June 2019, the
embedded value of the Company was RMB886,804
million, rising by 11.5% from the end of 2018. The Company
accelerated the development of long-term protection-oriented and
long-term savings businesses, with its product structure
continuously diversified. Out of the top ten insurance products by
the first-year regular premiums, six were protection-oriented
products. In the first half of 2019, protection-oriented business
of the Company developed rapidly, the percentage of which in the
first-year regular premiums increased by 5.0 percentage points
year-on-year. As at the end of the Reporting Period, the number of
long-term in-force policies was 297 million, an increase of 4.2%
from the end of 2018.
During the Reporting Period, the Company recorded a gross
investment income of RMB88,923
million, an increase of 68.0% year-on-year. Due to an
increase in gross investment income and the impact from the new
policy on pre-tax deduction of underwriting and policy acquisition
costs, net profit attributable to equity holders of the Company was
RMB37,599 million, rising by 128.9%
year-on-year.
During the Reporting Period, gross written premiums from the
life insurance business of the Company amounted to RMB307,461 million, a year-on-year increase of
1.0%. Gross written premiums from the health insurance business
amounted to RMB62,416 million, a
year-on-year increase of 29.8%. Gross written premiums from the
accident insurance business amounted to RMB8,099 million, a year-on-year increase of
0.6%.
In the first half of 2019, the Company recorded a rapid growth
in its core business by consistently focusing on its business value
growth and pushing forward business restructuring and product
diversification. In particular, protection-oriented business saw
rapid development and the business structure was continuously
optimized. The Company firmly implemented the sales force
development strategy of quality improvement and size expansion, and
further strengthened its day-to-day management. As a result, the
size of the sales force expanded steadily with its quality
consistently improved. As at the end of the Reporting Period, the
total number of sales force from all channels amounted to about 1.9
million.
Exclusive Individual Agent Channel. In the first half of
2019, centering on business value growth, the exclusive individual
agent channel endeavored to transform and upgrade in its sales
management, and strengthened the coordinated development among
business, sales force and day-to-day management, so as to achieve
continuous growth and its new business margin increased
effectively. During the Reporting Period, gross written premiums
from the exclusive individual agent channel amounted to
RMB290,556 million, an increase of
6.7% year-on-year. First-year regular premiums from the channel
were RMB64,529 million, an increase
of 5.0% year-on-year, which accounted for 99.81% of long-term
first-year premiums. In particular, the percentage of first-year
regular premiums with a payment duration of ten years or longer in
first-year regular premiums was 51.74%, an increase of 19.14
percentage points year-on-year. New business margin of half year's
sales of the exclusive individual agent channel reached 36.6%, a
year-on-year increase of 4.2 percentage points. Renewal premiums
amounted to RMB218,023 million, an
increase of 6.5% year-on-year. In the first half of 2019, the sales
force of the exclusive individual agent channel was improved in
both quantity and quality, and the expansion of the sales force
vigorously drove the business growth. As at the end of the
Reporting Period, the number of exclusive individual agents was
1.573 million, growing by 9.3% from the end of 2018. In the
meantime, the quality of the sales force was improved consistently,
with its monthly average productive agents increasing by 38.2%
year-on-year. Moreover, the monthly average number of agents
selling designated protection-oriented products rose substantially,
representing an increase of 52.1% year-on-year.
Bancassurance Channel. In the first half of 2019, the
bancassurance channel furthered its business restructuring by
firmly concentrating on the long-term regular premium business, and
the new business margin of half year's sales of the channel
improved constantly. During the Reporting Period, single premiums
from the bancassurance channel were significantly reduced to
RMB12 million from RMB8,638 million in the corresponding period of
2018, and gross written premiums from the channel were RMB47,357 million, a decrease of 15.4%
year-on-year. First-year regular premiums were RMB17,315 million (a year-on-year decrease of
8.0%), which accounted for 99.93% of the long-term first year
premiums (a year-on-year increase of 31.39 percentage points). In
particular, first-year regular premiums with a payment duration of
ten years or longer were RMB4,012
million (a year-on-year increase of 86.5%), which accounted
for 23.17% of the first-year regular premiums (a year-on-year
increase of 11.74 percentage points). New business margin of half
year's sales of the channel was 21.5%, rising by 7.9 percentage
points year-on-year. Renewal premiums amounted to RMB29,198 million (a year-on-year increase of
4.4%), which accounted for 61.66% of the gross written premiums
from this channel (a year-on-year increase of 11.70 percentage
points). As at the end of the Reporting Period, the number of sales
representatives of the bancassurance channel reached 0.241 million
and the quality of the sales force of the channel was further
improved, with the monthly average active insurance planners for
long-term business increasing by 43.4% year-on-year.
Group Insurance Channel. In the first half of 2019, the
group insurance channel consistently pushed forward diversified
business development and strengthened business structural
optimization, which therefore led to steady growth of various
businesses. During the Reporting Period, gross written premiums
from the group insurance channel were RMB16,798 million, an increase of 12.1%
year-on-year. Short-term insurance premiums from the group
insurance channel were RMB13,977
million, an increase of 19.0% year-on-year. The Company
actively carried out the pilot program of tax deferred pension
insurance business and consistently promoted the tax-advantaged
health insurance business. As at the end of the Reporting Period,
the number of direct sales representatives reached 0.079 million,
among which the number of the high-performance representatives
reached 0.051 million.
Other Channels. In the first half of 2019, gross written
premiums from other channels reached RMB23,265 million, an increase of 34.8%
year-on-year. The Company actively developed the policy-oriented
health insurance businesses, including supplementary major medical
expenses insurance and long-term care insurance, which consistently
led the market. As at the end of the Reporting Period, the Company
undertook a total of over 230 supplementary major medical expenses
insurance projects, 30 long-term care insurance projects and 38
supplementary medial insurance projects for social security,
providing services for nearly 400 million people in 28 provinces.
The Company continued to explore the development of online
insurance sales and intended to provide more convenient ways of
insurance application and diversified financial services to its
customers via various measures, such as establishing online malls,
streamlining operation procedures and enriching insurance products,
etc.
Since 2019, the growth momentum of the global economy has
declined gradually, along with the international trade frictions
taking place frequently. The domestic economy generally remained
stable but still under a downward pressure. In domestic bond
market, the interest rate constantly fluctuated at a low level, and
in domestic stock market, although it has been pulled back after a
surge in the first quarter of 2019, the market saw a notable rise
compared to the beginning of 2019. In the first half of 2019, the
Company laid emphasis on asset-liability interaction from the
perspective of assets and liabilities management. In respect of
fixed income investments, the Company increased allocation
particularly in bonds with long duration with preemptive actions by
seizing allocation opportunities on interest rate trend and market
supply. The Company also flexibly allocated to selected bank
deposits and non-standard fixed-income investments, and strived to
increase investment yields from allocation with stringent credit
risk control. In respect of equity investments in the open market,
the Company took active actions by capturing any opportunities
arising in the equity market effectively and added exposure to
long-term core assets at an attractive valuation level while
catching short-term trading opportunities. During the pullback
period of the market, the Company closely monitored risk exposure
with disciplined rebalancing strategy, thus achieving satisfactory
investment returns. As at the end of the Reporting Period, the
Company's investment assets reached RMB3,304,129 million, an increase of 6.4% from
the end of 2018.
As at the end of the Reporting Period, among the major types of
investments, the percentage of bonds changed to 40.95% from 42.20%
as at the end of 2018, the percentage of term deposits changed to
16.84% from 18.02% as at the end of 2018, the percentage of
debt-type financial products increased to 11.43% from 11.32% as at
the end of 2018, and the percentage of stocks and funds (excluding
money market funds) increased to 10.79% from 9.03% as at the end of
2018.
The Company's debt-type financial products mainly concentrated
on the sectors such as transportation, public utilities and energy,
and the financing entities were primarily large central-owned
enterprises and state-owned enterprises. As at the end of the
Reporting Period, over 98% of the debt-type financial products were
rated AAA or above by the external rating institutions. In general,
the quality of the Company's debt-type investment assets was in
good condition and the debt risks were well controlled.
In the first half of 2019, the Company's net investment income
was RMB72,030 million, an increase of
RMB7,201 million from the
corresponding period of 2018, rising by 11.1% year-on-year. Given
the low interest rate environment, the Company allocated to fixed
income products and high-dividend stocks in advance by catching
market opportunities and its net investment yield remained stable
at 4.66%. In the equity investments, the Company balanced the
allocation to long-term core assets and short-term trading. Coupled
with the effect of the surge in the domestic stock market in the
first half of 2019, the Company's investment income rose
significantly. The gross investment income of the Company reached
RMB88,923 million, an increase of
RMB35,986 million from the
corresponding period of 2018. The gross investment yield was 5.78%,
rising by 200 BPs from the corresponding period of 2018. The
comprehensive investment yield taking into account the current net
fair value changes of available-for-sale securities recognized in
other comprehensive income was 8.25%, rising by 464 BPs from the
corresponding period of 2018.
Outlook
In the second half of 2019, upon our sound foundation, the
Company will further accelerate our business development and
concentrate on business value growth; carry out in-depth reforms
steadily in a bid to promote the implementation of the "Dingxin
Project" with satisfactory results; consistently push forward the
transformation of sales force and facilitate the integration of
business sales and training in great depth in order to increase the
productivity of sales force; continue to focus on the markets in
large- and medium-sized cities and consolidate our leading
positions in rural markets; expand the R&D function and speed
up technology application and incubation for the purpose of
enhancing the digitalization of the Company; and strictly comply
with regulatory requirements to strengthen the management and
control of risk sources.
The Company will maintain strategic consistency, uphold the
strategic goal of "China Life Revitalization", stick to the
designated blueprint all along, and work concertedly for reforms
with keen determination. The Company will strive to reward people
from all walks of life who care and are concerned about the
development of China Life with our outstanding operating
results.
******
About China Life Insurance Company Limited
China Life Insurance Company Limited is a life insurance company
established in Beijing, China on
30 June 2003 according to the
"Company Law of the People's Republic of
China" and the "Insurance Law of the People's Republic of China". The Company
was successfully listed on the New York Stock Exchange, the Hong
Kong Stock Exchange and the Shanghai Stock Exchange on 17 and
18 December 2003, and 9 January 2007, respectively. The Company's
registered capital is RMB28,264,705,000.
The Company is a leading life insurance company in China and possesses an extensive distribution
network comprising exclusive agents, direct sales representatives,
and dedicated and non-dedicated agencies. The Company is one of the
largest institutional investors in China, and becomes one of the largest
insurance asset management companies in China through its controlling shareholding in
China Life Asset Management
Company Limited. The Company also has controlling shareholding in
China Life Pension Company
Limited.
Our products and services include individual life insurance,
group life insurance, and accident and health insurance. The
Company is a leading provider of individual and group life
insurance, annuity products and accident and health insurance in
China. As at 30 June 2019,
the Company had approximately 297 million long-term individual and
group life insurance policies, annuity contracts, and long-term
health insurance policies in force. We also provide both individual
and group accident and short-term health insurance policies and
services.
Forward-looking statements
Certain statements contained in this press release may be viewed
as "forward-looking statements" as defined by Section 27A of the
U.S. Securities Act of 1933 and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may mean that the actual performance, financial condition or
results of operations of the Company could be materially different
from any future performance, financial condition or results of
operations implied by such forward-looking statements. Further
information regarding these risks, uncertainties and other factors
is included in the Company's Annual Report on Form 20-F for the
fiscal year ended 31 December 2018
filed with the U.S. Securities and Exchange Commission, or SEC, on
24 April 2019; and in the Company's
other filings with the SEC. You should not place undue
reliance on these forward-looking statements. Unless
otherwise stated, all information provided in this press release is
as of the date of this press release, and the Company undertakes no
duty to update such information, except as required under
applicable law.
Unless otherwise indicated, the Chinese insurance market
information set forth in this press release is based on public
information released by China Banking and Insurance Regulatory
Commission.
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SOURCE China Life Insurance Company Limited